Oil Edges Up After Report Shows Smaller-Than-Expected Crude Rise

(Bloomberg) -- Crude inched higher from the close after an industry report showed a decline in U.S. fuel stockpiles and a build in crude supplies that came in less than analysts expected.

Futures rose from the settlement in New York on Wednesday after the American Petroleum Institute was said to report domestic gasoline inventories dropped 1.55 million barrels last week, while distillate stocks fell 758,000 barrels. Crude stockpiles rose 1.26 million barrels, below the increase of 3.1 million barrels that analysts in a Bloomberg survey expect.

“The overall crude build was a bit less than expectations,” said Kyle Cooper, a consultant at ION Energy. At the same time, the draws in gasoline and distillate supplies were supportive, he said.

Oil closed at the highest since November as growing concerns about Venezuelan supplies add to confidence that OPEC and its partners are draining the global supply glut.

Oil Edges Up After Report Shows Smaller-Than-Expected Crude Rise

Crude has climbed more than 25 percent this year in New York as the Organization of Petroleum Exporting Countries and its allies work to trim output. However, the ongoing U.S.-China trade war has continued to threaten global economic growth, as well as demand. In the U.S., crude production remains near 12 million barrels a day. Futures are still roughly $20 lower from their early-October high.

The OPEC+ Joint Technical Committee assessed compliance with the group’s production curbs at 83 percent in January, the first month of the deal, while Saudi Arabia and Russia have signaled they’ll step up their cuts. Meanwhile, the resistance of Nicolas Maduro to caving in to pressure against his regime signals Venezuela’s woes may drag on.

“The market looked like it picked its head up when we pushed through yesterday’s highs,” said Gene McGillian, manager of market research at Tradition Energy. Oil’s rally seems to be “driven mostly by the idea that the production cuts by OPEC and Russia are beginning to really show up and the toughened sanctions on Venezuela are adding to the tightened supply outlook.”

West Texas Intermediate for March delivery, which expired Wednesday, added 83 cents to $56.92 on the New York Mercantile Exchange, the highest since Nov. 12. The more active April contract rose to $57.28 a barrel at 4:45 p.m. in New York after settling at $57.16.

Brent for April settlement gained 63 cents to $67.08 a barrel on the London-based ICE Futures Europe exchange.

The API is also said to report Cushing, Oklahoma crude supplies increased 3.24 million barrels. A Cushing build of that size would be the largest since March 2018 if confirmed by U.S. government data released on Thursday.

Other oil-market news:
  • Gasoline futures rose 2.2 percent to settle at $1.5981 a gallon. 
  • OPEC and its allies estimated that they implemented 83 percent of their pledged supply cuts in January, according to delegates. 
  • Citigroup Inc. boosted its Brent price forecast for this year as output cuts by Saudi Arabia and other OPEC nations shrink global supplies.

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